In reporting its third quarter results, Verizon described the period of one of strong customer growth and solid cash flow.
The company had third quarter 2003 fully diluted EPS of 64 cents, or 67 cents before one special item. Reported earnings were $1.8 billion in the third quarter, compared with $4.4 billion in last year's third quarter when Verizon recorded net special gains and tax benefits from sales of businesses. Third quarter 2003 earnings were $1.9 billion before special items, compared with $2.1 billion in third quarter 2002.
Verizon posted its fifth consecutive quarter of year-over-year revenue growth, as the company's overall revenue mix continued to shift to growth areas such as wireless. The overall revenue gain was supported by significant customer additions in growth markets, as well as successful new marketing initiatives, which also offset competitive pressures on revenues in other areas of domestic telecom. Total third-quarter reported operating revenues of $17.2 billion were up slightly from the third quarter 2002. Last year's total included revenues from domestic telecom access lines that the company has since sold.
Excluding revenues from these access lines, Verizon's third quarter 2003 revenues of $17.2 billion represented a 1 percent increase from $17 billion in third quarter 2002.
The company saw customer growth in a number of segments.
Verizon Wireless added 1.4 million net subscribers in the third quarter, the highest quarterly increase in the company's history, bringing its customer total to 36 million. Revenue growth for the business was 18.2 percent over last year's quarter. For the fifth consecutive quarter, Verizon Wireless posted double-digit, year-over-year revenue increases. Verizon Wireless' service revenues grew 14.9 percent, to $5.3 billion, from $4.6 billion in the third quarter of 2002. Verizon Wireless' total revenues grew 18.2 percent in the third quarter 2003, to $5.9 billion, from $5 billion in the third quarter 2002. The additional increase in total revenue was driven by growth in equipment and other revenues.
The long-distance business at Verizon saw 1.3 million net additional long-distance lines during the quarter. Revenues from long-distance increased 17.2 percent to $1 billion in third quarter 2003, compared with third quarter 2002.
On the DSL front, Verizon added 185,000 net additional lines to reach 2.1 million total lines, growth of 27 percent since year-end 2002.
Third-quarter domestic telecom revenues were $9.9 billion -- a decline of 4.1 percent compared with third quarter 2002 and essentially flat compared with second quarter 2003.
